Strategy

Now hear this: Tony Chapman, founder, Capital C Communications

What does it take for a nation to compete globally? The head of a respected Toronto marketing firm sounds the clarion call with an impassioned plea for a Canadian national strategy.

The last federal budget certainly spread the money around, but it lacked long-term planning, and that’s bad news for this country down the road, says Tony Chapman, founder of marketing agency Capital C Communications in Toronto. He tells Andy Holloway why Canada needs an innovation vision before it starts spending any more of our tax dollars.

The government went from being sort of fiscally responsible to spraying a firehose of dollars at great political sound clips — infrastructure, broadband and the like. The government needs a vision for this country. And a vision is not about predicting the future, it’s about anticipating the future opportunities that ideally suit our culture, capabilities and geography.

This country has been incredibly good to me, and I just fear for its future. We’re all so complacent because of the vast natural resources we have and yet, when I look around, I don’t really see a strategy about what kind of economy we have to evolve to in the future and, more importantly, how are we going to get there. I’d like to see this country become unquestionably the best country in the world to live in for the next 100 years, and there’s no reason we can’t get there, but I don’t just see the strategy.

Look at natural resources. What’s our long-term strategy? Is it to continue to let foreign acquisitions happen, and they provide the capital and we just take a royalty and a tax dollar? Or do we want to vertically integrate off that? What role will infrastructure play in making us more competitive and making our cities easier to live in?

Everybody has an ability to campaign why their idea needs money. I will bet you that most of them are doing it with the greatest of intentions, the highest motivations. But until we come up with a vision that says this is Canada 10 years from now, this is how we’re going to get there and these are the priorities, these are the businesses we’re going to move away from, and what you get is a lot of irresponsible investing.

When somebody says they are going to take $4 billion of our money and invest it in the automotive industry, I need to understand how we are going to keep being a manufacturer of cars in the next 10 years and where that $4 billion is going to. Often, they just say we’re going to punish the car workers in Oshawa and make their salaries competitive with the Japanese carmakers. Then I have to be a bit of a cynic and say 19 out of the last 20 North American auto plants haven’t gone to Ontario. Are we competing with the Japanese car companies in Chatham, Ont., or are we talking about competing with Mexican labour?

A story I often tell is, A guy goes to a quarry, walks up to one guy and says, “What are you doing?” He says, “What are you, a moron? I’m cutting rock.” The same guy goes up to another person and he says, “I’m cutting rock and building a wall.” The third person doing the same job says, “I’m part of a team building a golden cathedral.” Until we present that golden cathedral and begin to understand that certain industries will be denied inside, that we’re going to prioritize and focus, I worry that we’re going to continue our track record of the public sector putting Band-Aids on festering sores.

The Dutch have declared that they are going to be a world superpower in repelling the ocean. People understand that, because the whole country is underwater, and it’s going to be a $50- or $100-billion industry very shortly as the water rises and people in places like New York will have to buy into the dike technology that the Dutch will be perfecting. But they are a totally aligned society on that. Everybody is focused. Their education, their marine engineers, are all focused on one of the things they have a strategic bet on. Denmark is doing that with wind power.

I have to believe that health and health sciences and solving the runaway costs of health care would be a pretty good business to be in during the next 25 years. But I don’t hear our leaders saying these are our three or four best bets. For example, when I stand at the top of Princess Margaret Hospital with Paul Alofs, who runs the foundation, he points out that within a square mile we have the Mars Centre, Mount Sinai Hospital, 50,000 or 60,000 workers in health sciences and we’re producing some amazing innovation. Health science, an aging population, our ability to combine an educated workforce and technology and the relationships with pharmaceutical companies — that would make an interesting bet. What do we want to be in the health sciences play, and what kind of dollars are going to be required to get there? What kind of partnerships between the private sector, the public sector and the educational facilities are needed?

I have to believe getting the oil out of our oilsands in an environmentally friendly way and an efficient way would be a pretty good bet for this country. Where should I best invest $4 billion? In the oilsands, where we have more oil in a safe haven than any country in the world? Or trying to keep General Motors going for another four months? I say show me the criteria for both and let me make the decision. But Canadians are not particularly suited to being the most efficient manufacturers in the global economy.

Why can’t we be a petri dish to the world? Leverage our multicultural society, our access to most of the head offices in the world, our shared border with the United States, and be a test market for new management models, new product innovations, perfecting them so that these multinationals can then fast-track them around the world.

One of the things we would have to have are insights on different cultures around the world, not just data about where they live and their geography and how many people are under the age of 20, but how they think and how they behave. We have the greatest data banks in the world on insights on how different cultures are, just like we have one of the greatest data banks on stem cell research at Princess Margaret, and we’re constantly refining it, constantly talking to these people, polling them. Anthropologists, sociologists, demographers are all looking at it, and we’re putting these really rich insights together. By the way, we also have the ability to talk wise with these cultures because most of them are represented in Canada. Instead of just statistics, which give you a sense of whether there is a market, we’re getting whether there is potential for demand.

With predictive modelling we would start testing these ideas out and, from a qualitative point of view, figure out if these people get it immediately. Would they be excited about this product? Would they have the propensity to buy it? With predictive modelling from a quantitative point of view, we could figure out how these products will do in these different markets. How would we have to repackage, repurpose and reposition these products to do well in a market that, say, has six shampoos versus a market that has 300 shampoos.

If this is one of the pillars of our new society that we build, then we can start calibrating the public, private and educational sectors. Instead, I have two daughters who are going to inherit a country that is going to spend $60 billion without a strategy. Where are we going to compete? We have not had any productivity gains in this country in the past 10 years, relatively zero. If we don’t increase productivity, our standard of living goes down. With a 1% increase, our standard of living doubles every 70 years; with a 2%–3% gain, there would be more than enough growth to solve every societal problem we have — health care, roads, infrastructure. We have all these resources in the ground that every country around the world would be envious about, we have a multicultural society that coexists that every country is envious about, and yet we can’t get productivity gains. Fundamentally, we’re not running this country like a company.

It’s all about sound bites in the media and keeping voters happy. Imagine somebody having the courage to say we’re not going to be in the automotive manufacturing business in five years. Here’s our strategy for exiting and here’s how we’re going to repurpose all the people that have made their livelihoods in that. Or, if we’re going to be in that business, we’re going to consolidate around what? What are we going to be very good at and very competitive at?

We’re the lowest in the G8 on patent applications. How embarrassing is that? We’re hewers of wood and pumpers of oil. If we have a vision and a strategy, then we have a purpose. If we have a purpose, then we can attract passionate people that want to be part of building the golden cathedral. And if we have passionate people, we can overcome the people who are trying to hold onto the status quo.